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Many analysts follow insider buying trends exactly for that reason. Their transactions are closely monitored and can tell us a lot about where the business is heading.

Business Section: Investing Ideas

If insiders are buying the stock of the biotech company they’re working for, then they have to either think that the stock is undervalued or that something big is going to happen, such as a drug receiving FDA approval.

Below is the final list from our screen. It shows biotech companies with market caps over $50 million and insider buying over the past six months. Do you think the insiders know something that nobody else does?

Use this list as a starting point for your own analysis.

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Over the last six months, insiders were net buyers of 4,718,990 shares, which represents about 16.89% of the company's 27.94M share float.

2. Infinity Pharmaceuticals, Inc. (INFI, Earnings, Analysts, Financials): Engages in the discovery and development of medicines for the treatment of cancer and other conditions in the United States. Market cap at $2.34B.

Over the last six months, insiders were net buyers of 5,380,195 shares, which represents about 18.43% of the company's 29.19M share float.

3. Lexicon Pharmaceuticals, Inc. (LXRX, Earnings, Analysts, Financials): Focuses on the discovery and development of drug candidates for the treatment of various human diseases. Market cap at $1.11B.

Over the last six months, insiders were net buyers of 3,000,000 shares, which represents about 1.32% of the company's 227.31M share float.

Over the last six months, insiders were net buyers of 1,400,000 shares, which represents about 4.26% of the company's 32.84M share float.

6. Targacept, Inc. (TRGT, Earnings, Analysts, Financials): Engages in the design, discovery, and development of novel Neuronal Nicotinic Receptors (NNR) Therapeutics for the treatment of diseases and disorders of the central nervous system. Market cap at $148.22M.

Over the last six months, insiders were net buyers of 2,023,840 shares, which represents about 8.88% of the company's 22.78M share float.

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